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Strong fleet subscription base growth in all regions and planned acceleration of growth
Quartix Technologies plc (AIM:QTX), one of Europe’s leading suppliers of vehicle telematics services and driver analytics, is pleased to announce its audited results for the year ended 31 December 2021. The Group’s Financial Statements and detailed results presentations are available in the Investors section of our website at: www.quartix.com/investors.
The business reported it had made a strong start to 2022, with fleet new unit subscriptions growth of 25% for the first two months, leading to a £0.4m increase in annualised recurring revenue. Acceleration of growth is planned, targeting annualised recurring revenue of at least £30.0m by the end of 2023.
- Group revenue decreased by 1.2% to £25.5m (2020: £25.8m)
- Fleet revenue grew by 7.7% to £23.8m (2020: £22.0m)
- Fleet revenue represented 93.1% of total revenue (2020: 85.4%)
- Insurance revenue decreased by 53.4% to £1.8m (2020: £3.8m)
- Adjusted EBITDA decreased by 27.3% to £5.7m driven by planned investment for growth (2020: £7.9m)
- Fleet telematics services profits increased by 1.0% to £19.8m (2020: £19.6m)
- Fleet customer acquisition investment increased by 21.6% to £8.4m (2020: £6.9m)
- Operating profit decreased by 6.5% to £5.3m (2020: £5.7m)
- Profit before tax decreased by 6.6% to £5.3m (2020: £5.7m)
- Adjusted diluted earnings per share of 9.18p (2020: 13.16p), diluted earnings per share of 10.07p (2020: 9.82p)
Our key focus for the past year was investing in the growth of our core Fleet operations, both in the UK and overseas to drive an increase in recurring revenues. As noted in the Highlights section, the annualised recurring revenue increased by £2.0m, at a constant currency rate, to £23.9m at 31 December 2021. This was achieved, with the Group experiencing strong growth in its Fleet tracking subscription platform. Performance in the first half of the year was particularly encouraging; new subscriptions were 31.0% ahead of the prior year (which was adversely impacted globally by covid restrictions) but also 8.7% above the 2nd half of 2020. Fleet revenue grew by 7.7% during the year; in line with the growth in the value of the subscription base.
This performance brought new subscriptions for the year 15.8% ahead of those for 2019, which was previously our strongest year for installations. It was also pleasing to see that, despite the pandemic, Group attrition marginally improved to 11.6% (2020: 12.2%) and price erosion reduced to 6.0% (2020: 6.7%). For the first time ever our installed base now exceeds 200,000 units, and the customer base exceeded 20,000 customers.
Our core fleet business delivered excellent progress in a further year of investment. There was particularly strong growth in the subscription base for France and the new European territories, so that for the first time ever our installed base now exceeds 200,000 units. During the course of the year, we won 5,868 new fleet customers (2020: 4,484). French fleet revenue increased by 19.3% to €5.1m (2020: €4.3m).
Total investment in fleet customer acquisition, net of revenue, increased by £1.5m to £8.4m in 2021 (2020: £6.9m). This investment will continue in 2022 as we continue to develop our business across each of our markets, thereby increasing recurring revenues.
Research and development
The Group is committed to the continuous enhancement of its core software and telematics services, and we aim to offer a market-leading platform which addresses the most common needs of SME customers in the service sector of each of our target markets. We are undergoing an extensive modernisation program of our core software and telematics code, both from a technology and user experience perspective.
To address product upselling opportunities, Quartix has embarked on a number of incremental added value features to its existing analytical software offerings, including ones concerning fleet migration to electric vehicles analysis and vehicle condition monitoring.
Richard Lilwall, Chief Executive Officer of Quartix, commented:
“I am pleased to report another year of strong growth in our Fleet division in 2021, despite the challenges presented by COVID-19 globally. Our fleet subscription base grew by 17% and for the first time broke the 200,000 units milestone. This led to an associated increase in annualised recurring revenue of £2.0m, at a constant currency rate, to £23.9m at 31 December 2021. Our increased marketing investments drove an increase in new subscription numbers of 18% to break a further milestone of 50,000 new units. Fleet attrition was also very encouraging, showing a reduction from 12.2% to 11.6% as our service focused proposition and competitive price point continues to drive customer loyalty.
We cemented our position as a UK leader with a regional base of 125,085 showing growth of 9%. Growth in our international markets continued with particularly strong results in France expanding 29% to 40,343 vehicles. USA increased by 19% to 27,912 units and other Europe territories grew 141% from 3,904 units to 9,394.
We have made a strong start to the year during the first two months, with growth of 25% in new fleet unit subscriptions and an increase of £0.4m in annualised recurring revenue, which supports our expectation that the annualised subscription base will increase at a significantly faster rate than was achieved in 2021. This gives us confidence for the coming financial period and beyond, targeting annualised recurring revenue of at least £30.0m by the end of 2023.
I am excited to work with the business to produce scalability and technology improvements across the Group. Investment in the US market will be a focus area over the short to medium term, therefore building a solid foundation for future growth which we expect to accelerate in the coming years.”